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I had a client that insisted that the IRS didn't send him $1,400. I asked him to check his bank for the months of April 2021, May and June. He found that the IRS had deposited $1,400. Another told me the same story. I asked him, have you filed for the last two years and he said "yes, you have filed for me electronically (sometimes.. I mean most of the time, I don't know who is who). I went to my records and I remember that the last two years he was all kisses and hugs with his girlfriend. I said, where is your girlfriend and he said, she left with another man... I politely said "call that guy that he took your girlfriend and your EIP3 because you signed a paper to have your deposit be sent to her account and the IRS uses the last bank account to send the stimulus". We both started laughing and he that was the end of the conversation. In this case, the IRS is right or at least the computer issued a check or direct deposit. I have not found one that is wrong but a few of my clients need to be reminded where the money went.

The problem is the state in question has to approve the use of the forms. There is nothing we, the software companies, or even the IRS can do to force the states to act more swiftly

The best thing I've ever gotten in a client's bits was a $50 off coupon for H&R Block. I thought about dropping their return off. The second best thing I've ever gotten was a 1099-SSA with a huge red stain on it and an arrow to a note from my client saying 'this is squash'.

I seem to have gotten a lot of the plastic binder/envelope things. Not sure what they're called, but they're just a little too wide to fit in my file drawer, plus I'm not paying to mail back crap like that with their tax return. And yeah, the ones who don't open their mail and give me all the envelopes. Or include tons of stuff I don't need, often things they don't even need. But better too much than too little, sort of.

Obviously, JohnH, they did it to see if you were paying attention! Congratulations; you win the kewpie doll. Include its FMV in your income for 2022.

The IRS doesn't need to prevent that. The IRS only follows the laws and if the laws have flaws, the IRS doesn't have the ability to "prevent" people from applying the law and taking the credits handed to them. Our elected officials are the ones that handed all the goodies and we have to take advantage. Too bad that to benefit, you MUST have one or more children. EIC, Child Tax Credit and child care credit are the winners in 2021.

I have the plastic sleeve client, several don't open envelopes, a couple staple happy ones, some that use a box of paper clips and one that puts sticky notes on everything. Like I need a sticky note to tell me a W2 is a W2.

You might recommend to your client that they (not you!) call. I've had two clients who called; one had their refund approved but not released and it took the phone call to release the hold so the IRS would actually send the check. The other never got (or so they said) the "we need you to prove who you are" letter. In both cases, the processing would never have proceeded without the calls. But yeah, most of them are just cases of take the deli ticket and wait in line to order your half pound of roast beef.

I have a couple of clients for whom we file every year without official requirements. One wants that SOL to be started. The other lives in subsidized housing and requires a copy of her return every year to prove her continued eligibility for the subsidy. If we have to prepare it anyway, it's dumb not to file it too. I charge very little for those returns (and no charge for the 2nd paper copy for the lady getting the subsidy - and she gives it to the board, or whoever demands it).

I really hammered my blog early on with instructions to look for and keep those letters from the IRS. Honestly, we have not had a single client to date who did not bring them in.

Wait, now the $600 charitable deduction is reducing AGI? Wasn't that 2020 only for a maximum $300? Doesn't the 2021 charitable deduction NOT reduce AGI?

If the program was not subtracting the $ 600 charitable deduction before then it was wrong. Apparently you have experienced an "unannounced correction" to bring the program in line with Form 8995 instructions.

Yes, thanks FDNY. Realized that after the fact.

This was according to Merry over on the Drake forum saying that the patch for all these forms should be available today:

Different states have different thresholds. There are reasons why the court might appoint a representative regardless of estate size (minors as beneficiaries perhaps, or out-of-state real estate). Only mark the box that no personal rep has been or will be appointed if that is truly the case. The person who signs the 1310 is promising that the refund will be distributed according to the will or state law. If that doesn't happen, or if some long-lost relative files a claim, you don't want to be in the middle of it.

Thanks for the help. Apparently it is much the same here. How they arrive at these figures is beyond me. Some time back a former client's wife died leaving a sizable estate but the heirs needed no certification but then sizable parts of her estate passed directly by transfer on death setups and county land taxable land values are largely below market.

Form 8915-F when it's available.

That's what has worked for me in the past. In my state a "Small Estate" is one with less than $200,000 in Real Estate and $75,000 in personal assets in which case their is no court appointed personal representative. The only legal document is what is called a "Small Estate Affadavit" which is filed with the court.

I don't think that it is just ATX. I use ProSeries and I am still waiting for some really stupid things to be approved for e-filing.

According to the Taxpayer Advocate's testimony to Congress today a second surge team is being pulled together.

I have one of those, too. I love her, but it's such a freaking pain.

Grandmabee, Tell them the charge is for being too organized.

I saw a TV commercial for this. How many clients will get these and not tell us?! This seems like nightmare tracking unless the credit card issuer will be providing the detailed reporting for the tax returns.

Agree with Abby and tell them why.

Add a records processing fee.

I had a client bring in a notebook today with the clear pages that each tax doc was inserted. So I have to pull them all out and copy and then yes he wants them back into the clear jackets and put back into the notebook. They think they are being helpful, helpful would be clients who open the enveloped and throw them away.

I don't think Credit Card Rewards have ever been considered taxable income. The issue will arise when the bitcoin rewards are used to purchase something, or converted to cash. At that time the FMV compared to the FMV at the time the rewards were issued, potentially would be taxable gain. Will anyone track that?

The PPP tax-exempt income increases stockholder's basis. It should be shown as an increase to Other Adjustments Account and doesn't add to AAA. Ordinarily the distribution would reduce AAA but not below -0- (losses can), and then any distribution not offsetting AAA would then reduce OAA. Did the distribution exceed basis?

I’m currently filing a return that I’ve informed the client that he no longer has a filing requirement, but he wants to continue due to ID theft. I only charge a minimal amount.

MA, RI, ME S Corp forms are all delayed and now the form availability is saying 02/21. It keeps moving out. My clients are all getting very impatient. I am not even seeing drafts. We have a ton of S Corps in MA, RI and ME....Makes it difficult when the return has multiple states...

Don't be embarrassed Terry. Uber forms are new to most of us, and we've all learned something from this thread so we'll be better prepared. And you of course are well-prepared for the next one. You should only be embarrassed when you believe a client who says "my return is really simple, or "I'm head of household" (single, no dependents), or "they already took the tax out" (just the 10% early distrib, not the income tax). Or the latest: "I didn't get any stimulus payment."

Had a grown child (parent had been my client, not grown child) call me frantic, because in her mother's (now deceased) retirement community apartment that "the kids" were cleaning out there were multiple IRS letters that said she hadn't reported her winnings from Mohegan Sun a few years before she died. But mother had stopped coming to me a couple years prior to her winnings, apologizing but saying she really didn't have to file any longer. "The kids" had already divvied up mom's bank accounts and things. How were they going to pay for that, the GC whined. I no longer knew mom's tax situation, but if she'd been filing returns it might've been past the SOL. No longer my problem. So, make sure your non-filer clients didn't take up gambling as a retirement hobby!

I received one, for me. It was when they first went to those letters instead of the employer sending in W4 forms in certain conditions. In my case, I withhold 0 until Dec, and make large payments (WH and estimated) in Dec. Been doing it for many years, but their software kicked me a letter because they say the no early year WH, not looking at my actual history. A phone call cleared it up.

The IRS sent my ex's employer a letter telling them to change their W4 to single 0, because she kept owing the IRS every year. and kept rolling it into an installment agreement. When she brought that letter in to me, it was all I could do to keep from laughing. I've never seen a letter like that for any of my other clients.

That's the best part. And the irony is that to take the mileage deduction, you had to have accounted for it anyway. Of course, their "accounting" is just pulling a number out of the air at year end.

It never ceases to amaze me some people's ability "not to listen" and make no attempt to understand a detailed explanation. It has a scientific explanation called a "normalcy bias". Any day now everything will return to "normal."

Likely in the same group that believes a calculation of zero withholding cannot be correct, and the employer must monitor the employee withholding to make sure the employee does not owe at the end of year.

Some of those old-timers are still positive they are getting a huge deduction on their itemized deductions, that currently-not-available-to-most-employees Form 2106.

I have encountered clients who are not interested in being educated on accountable plans and insist on doing it in the least tax efficient method.

It's possible but it's not smart. You're creating phantom income, which costs both the business and the individual more taxes. Yet, I still have clients with old timey sales reps that want it that way because... wait for it... THAT'S THE WAY IT'S ALWAYS BEEN DONE! Stupid is as stupid does.

This would be a nonaccountable plan for reimbursing expenses, and those reimbursements would be included in compensation.

Always report the 1099 amount to get by the IRS computer, then show the difference as an expense. Checks mailed late in December and not received until January, cause this all of the time.

Filing starts the SOL running. Why would you not file?

Maybe we need some kind of been there, done that emoticon/reaction button.

You are in good company, it happens to all of us at one time or another

Update. All of the descrepancies have been resolved. FYI- The amounts reported on the 1099K form are amounts either swiped, chip read, or manual input from the customers cards. This is a gross amount and not the amount actually deposited. Uber takes significant fees from the driver's which I knew. I think the taxpayer in this case led me down the wrong road by starting this conversation stating that Uber told her these were the amounts she received which was indeed incorrect. After I deducted the UBER fees, the amounts matched the bank deposits perfectly. So, note to self, don't let the client confuse you. I feel a bit embarrassed by this but will use the excuse that this all came about at a time when we were experiencing various technology issues and my brain was partially out to lunch.

I have had this come up but not in recent years. Never thought of using an actual letter, but it's a good idea. It needs to have a phrase, "based on the information and documents that you have provided to us . . . . . . "Please contact us if you become aware of any additional information . . . .

Only the portion installed within the 180 days would count. There are some special rules for exchanges involving build to suit property called "exchange accommodation titleholder" and the QI must hold the funds and title, because once client takes title the exchange is done. I don't usually post blogs, but this one has a lot of description and references for this. https://www.accruit.com/blog/can-property-improvement-costs-be-part-1031-tax-deferred-exchange

I can't recall that smoothing income and expenses is a tax principle. It certainly wasn't part of my CPA Exam or my Enrolled Agent Exam. However, it's certainly become part of what CFOs of publicly traded corporations do at the end of every month, quarter and year.

I found the 2802C to be the most humorous. After all, how can they know there's a withholding problem if they haven't processed a return? Seems to me the only time this notice would go out is after a return has been processed and the under withholding is known, so why suspend it?